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US President, Congress Push Alternative Fuels

October 27, 2009 1:33 PM

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US President, Congress Push Alternative Fuels

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President Bush is looking for new ways to encourage the use of alternative energy, and Democratic Party leaders who control Congress appear to be only too ready to comply. That leaves the big oil companies urging government to slow down -- a message delivered this week by the industry's trade association in Washington. VOA's Jim Fry reports.

President Bush inspected a couple of alternative-energy vehicles at he White House -- one a gasoline-electric powered hybrid with an extra-strength battery.

He displays the cars at the White House, he says, to demonstrate that his goal of cutting gasoline usage dramatically is realistic. "I know it is a necessary goal. It is necessary for national-security purposes. It is necessary for economic-security purposes. And it is necessary in order to be good stewards of the environment."

Environmental advocate Deron Lovaas, who works for the Natural Resources Defense Council, says it is urgent that Congress act quickly. "If the president is serious about his goal of a 20 percent reduction in gasoline production in 10 years, it is very serious. We need this policy, this Congress."

Energy conservationists say the U.S. Congress must require new cars to get much higher gas mileage, and the government must encourage automakers to produce more alternative-fuel vehicles.

They say tax cuts are needed to encourage more production of ethanol. The fuel is mostly made from corn in the U.S., but the president wants researchers to study how to use other crops to make ethanol.

The alternative fuel is rarely seen in many parts of the country now, but advocates want the government to require gas stations nationwide to sell ethanol. The president of the American Petroleum Institute, Red Cavaney, speaking in Washington, said it would be a mistake to use tax incentives for these purposes. "Government policies should be performance based, and they should provide a level playing field for all alternative fuels, and not pick winners and losers."

The oil industry enjoyed billions of dollars in tax breaks enacted in 2005 to encourage exploration and production of oil. Many argued that was inequitable. Lovaas says, "It seems to me by adopting big tax breaks, you are picking winners and losers."

Environmentalists may have an ally in the new Democrat-ruled Congress. The House of Representatives voted last month to scale back industry tax cuts by $14 billion.

Yet the industry claims tax breaks are crucial for exploration -- and for more discoveries like the 15-billion-barrel pool of oil found deep under the Gulf of Mexico last year, the largest find in a generation.

The petroleum companies want Congress to slow down the campaign for alternative fuels:

"We are not trying to stall here,” says Cavaney. “What we want to do is make sure that every stakeholder has a chance to come up and present their case, [to] look at it before we head down that path, because it is going to influence billions of dollars of investments."

But high prices at U.S. pumps and record oil-company profits have combined to make the oil industry unpopular.

Lovaas says big oil cannot stall. "They need to come to the table very quickly, because if they are not at the table, they could be on the menu."

As President Bush pushes new fuels, and the new Congress attacks old oil, the petroleum giants find new risk not in the oil fields, but in the halls of government.